Carlyle venture fund in £34m buyout

Carlyle Group’s Europe Venture Partners fund has invested in its first management buyout with the £34 million leveraged acquisition of the UK’s Kingston Inmedia, a satellite service provider.

Carlyle Europe Venture Partners (CEVP), the European venture capital fund managed by US private equity firm Carlyle Group, has invested in the £34 million (€51 million; $60 million) management buyout of Kingston Inmedia.

CEVP, which was launched in January 2000, spent the first two years of its life investing in mainly early-stage venture capital opportunities. But when the technology bubble burst, Carlyle scaled back the size of the fund from €730 million to €553 million.

It then began to focus more on later-stage investments, and underlined the new strategy in January 2004 when it appointed David Fitzgerald as managing director and co-head of the fund alongside Wolfgang Hanrieder. Fitzgerald was a former Apax partner responsible for later-stage telecom investments.

CEVP has already completed a number of later-stage deals. For example, in the same month as Fitzgerald’s appointment, it provided €14 million in expansion capital to Fennel Technologies, a German provider of automotive parts. But Kingston Inmedia is the first example of a management buyout from the fund, with debt finance having been provided by Barclays Leveraged Finance.

A source at Carlyle said the firm would be looking at similar opportunities over the next year, which is the last year that the fund is expected to be making new investments. The same source said the fund has between €100 million and €120 million still available for investments, together with an additional undisclosed amount set aside for follow-on funding.

Kingston Inmedia, which has been acquired from quoted UK communications specialist Kingston Communications, delivers enterprise, broadcast and internet solutions to business customers using satellite-based technologies. In 2003, it posted revenues of £33.4 million and EBITDA of £5.7 million.

“Carlyle’s significant international interests will enable us to capitalise on a number of expansion opportunities that were too divergent for our previous owner,” said Nick Thompson, CEO of Kingston Inmedia. “With the strong support of Carlyle, we hope to grow the company significantly over the next years.”